We recognise the vital role that good governance plays in delivering the best outcomes for all stakeholders in the business.
UK listed companies are required by the FCA (the designated UK Listing Authority), to include a statement in their annual accounts on compliance with the principles of good corporate governance and code of best practice set out in the Code. The provisions of the Code applicable to listed companies are divided into five parts, as set out below:
The business is managed by the Board of Directors, currently comprising two executive and five non-executive Directors. The offices of the Chairman and CEO are separate.
The Chairman ensures that all Directors are appropriately briefed to enable them to discharge their duties. Management accounts are prepared and submitted to the Board on a monthly basis. Before each Board meeting appropriate documentation on all items to be discussed is circulated.
Directors' attendance at Board and Committee meetings during the year is detailed as follows:
|Board||Audit and Risk||Remuneration||Nominations|
|No. of meetings||11||4||5||3|
- Left the Board and Committees on 26 September 2017.
- Appointed as Interim CFO on 26 September 2017. Not a statutory Director of the Company.
All Directors in office at that time were present at the AGM held on 19 September 2017.
The external auditor and the Head of Group Internal Audit attended all Audit and Risk Committee meetings.
Andrew Allner completed ten years' service as a non-executive Director of the Company in September 2017 and therefore is no longer regarded as independent in terms of the Code or by the ABI. This means that the Board was not compliant with section B.1.2 of the Code (more than half of the Directors, excluding the Chairman, should be independent) from September 2017 to the date of this report. However, we feel that maintaining a Board with an appropriate mix of skills and experience serves our stakeholders well.
The internal evaluation established that the Board had built on the evaluation from the previous year. With the appointment of Kevin Bradshaw in January 2017 a refreshing of the Group's strategy was undertaken, which was a further focus of the Board throughout FY2018. In addition, a review against new strategic objectives will be regularly monitored.
Board meetings have been held in different locations and territories during the year, which has had a positive impact on employee engagement and enhanced the Board's first-hand experience of the Company's operations; this will continue throughout FY2019.
The Board has considered the recommendations of the Davies Review into Women on Boards in the light of the provisions of both section B.2 of the Code, with which we are compliant, and of our existing policies and procedures.
The Board recognises the benefits of diversity at all levels of the business and in order to reinforce the Board's commitment to equality, the Board has endorsed an Equal Opportunities Policy, which may be found on our website at: www.northgateplc.com
Whilst the overriding criteria for Board appointments will always be based on merit, so as to encourage an appropriate balance of skills, experience and knowledge on the Board at all times, for all future appointments we will only use executive search firms who have committed to the Voluntary Code of Conduct on gender diversity.
At the same time the Board recognises that, particularly given the nature of its business, the development of a pool of suitably qualified candidates may take time to achieve and therefore does not believe it is appropriate to set targets.
At 30 April 2018 29% of Board members, 19% of the senior management team and 30% of all employees were female.
Conflicts of interest
Pursuant to those provisions of the Companies Act 2006 relating to conflicts of interest and in accordance with the authority contained in the Company's Articles of Association, the Board has put in place procedures to deal with the notification, authorisation, recording and monitoring of Directors' conflicts of interest and these procedures have operated effectively throughout the year and to the date of signing of this report and accounts.
Although no system of internal controls can provide absolute assurance against material misstatement or loss, the Group's system is designed to provide the Directors with reasonable assurance that, should any problems occur, these are identified on a timely basis and dealt with appropriately.
Confirmation that the Board has performed an assessment of the risk management and internal control systems of the Group, as required by the Code provision C.2.3, is contained in the Managing Risk report.
The Board has established a confidential telephone service, operated by an independent external organisation, which may be used by all staff to report any issues of concern relating to dishonesty or malpractice within the Group. All issues reported are investigated by senior management and Group Internal Audit as appropriate.
Information and communication
Each reporting segment prepares monthly management accounts with a comparison against their business plan and prior year, with review by management of variance from targeted performance levels. These commentaries are consolidated and submitted to the Board. Year to date actuals are used to guide forecasts, which are updated regularly and communicated to the Board.
Each reporting segment prepares a three-year business plan on an annual basis. This is presented to and approved by the Board. Performance against these plans is reviewed on a monthly basis.
A description of the work of the Audit and Risk Committee. Both the external auditor and Head of Internal Audit report directly to the Committee.
Details of the Company's remuneration policy and the remuneration of each Director are given on Remuneration report.
5 Relations with shareholders
Throughout the year the Company maintains a regular dialogue with institutional investors and market analysts, providing them with such information on the Company's progress and future plans as is permitted within the guidelines of the Listing Rules. In particular, twice a year, at the time of announcing the Company's half and full year results, they are invited to briefings given by the CEO and CFO.
The Company's major institutional shareholders have been advised by the CEO that, in line with the provisions of the Code, the Senior Independent Director and other non-executives may attend these briefings and, in any event, would attend if requested to do so.
All shareholders are given the opportunity to raise matters for discussion at the AGM, for which more than the recommended minimum 20 working days' notice is given.
Details of proxies lodged in respect of the AGM will be published on the Company's website as soon as is practicable following the meeting.
Significant interests in shares are detailed on Report of the Directors.
Compliance with the Code
The Board considers that the Company complied with the provisions of the Code throughout the year, with the exception of provision B.1.2, as described in section 2 above.
25 June 2018